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Information Systems in Business:

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1 Information Systems in Business:
Organizations, Management and Networked Enterprise Term: 2009/2010 Week 2 ITU Management Faculty Management Information Systems N. YILDIRIM

2 ITU Management Faculty – MIS
Index – Information Systems in Business: Organizations, Management and the Networked Enterprise (1) INTRODUCTION TO INFORMATION SYSTEMS Terminology for Information Data Valuable Information Information System Manegement Information Systems Role of Information Systems in Change MANAGEMENT INFORMATION SYSTEMS I) Information Systems in (Global) Business Today Dimensions of and Influences on information systems Content of Information Systems Interrelations between BIS and Organisation How Businesses Use Information Systems Digital Economy, Digital Business and Business Models Strategic business objectives of Information systems Information Systems in Organizations and Strategy Making IS Classifications by Functions and Organizational Structures of the Enterprise Terminology for Information Systems Information Systems in Social Concept Contemporary Approaches Information Society Trends ITU Management Faculty – MIS

3 ITU Management Faculty – MIS
Working with Systems Systems development The activity of creating or modifying an existing business system Systems investigation and analysis Defines the problems and opportunities of an existing system Systems design Determine how a new system will work to meet business needs Systems implementation Creating and acquiring system components defined in the design Systems maintenance and review Checks and modifies the system so that it continues to meet changing business needs ITU Management Faculty – MIS

4 System Development Loop
Systems development DEFINING THE PROBLEM : Understanding the current system or need for the system – Requirements List, “Contract”, What is the Gap? Systems analysis Corrective Actions Preventive Actions Revisions Modifications Systems design FINDING THE SOLUTION : Designing/Defining the “needed/required” system– Specifications, “How it should be?” Systems implementation IMPLEMENTING THE SOLUTION : Building, Project, Hands-on work, “Closing the Gap” Documentation Training Structural Change (+Revision) PERFORMANCE EVALUATION : Control, Check, “Measuring the Gap” Systems Review And Audit Systems maintenance and improvement ITU Management Faculty – MIS

5 System Development Project
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6 ITU Management Faculty – MIS
Terminology Data Streams of raw facts Distinct pieces of information, usually formatted in a special way Elementary description of things, events, activities, and transactions that are recorded, classified, and stored, but not organized to convey any specific meeting Information Data that has been, processed, organized and shaped so that they have meaning, use and value to the recipient A collection of facts organized in such a way that they have additional value beyond the value of the facts themselves Knowledge Information that has been organized and processed to convey understanding, experience and expertise as they apply to a current problem or activity An awareness and understanding of a set of information and how that information can be made useful to support a specific task concepts, experience, and insight that provide a framework for creating, evaluating, and using information. Knowledge base The collection of data, rules, procedures, and relationships that must be followed to achieve value or the proper outcome Wisdom the collective and individual experience of applying knowledge to the solution of problems. ITU Management Faculty – MIS

7 System Development Project
PROBLEM Measurement Data Processing Information Knowledge Analysis Decision Action First Outcomes Follow up ITU Management Faculty – MIS

8 System Development Project
Population Census of Population Each citizen Computing Population Calculation of Population Growth Comparing with objectives High Population Growth Pop.Planning Public Training Minor Decrease in Pop. Population Records Nr. Of new TC Ids ITU Management Faculty – MIS

9 ITU Management Faculty – MIS
Terminology Process A set of logically related tasks performed to achieve a defined outcome (n) An executing program. The term is used loosely as a synonym of task. (v) To perform some useful operations on data. ITU Management Faculty – MIS

10 Information Technology
Definition: the hardware and software a business uses to achieve its objectives. any machine technology that is controlled by or uses information for operation Example: a programmable industrial robot receiving instructions from a computer-based database ITU Management Faculty – MIS

11 Information Systems Components: Data
Hardware Telecommunications People Data Software The raw inputs for entry into information systems Organized, processed and stored by an IS to support user information needs Provides basis for qualitative/quantitative analysis ITU Management Faculty – MIS

12 “Data” as an Information System Component
(1) Distinct pieces of information, usually formatted in a special way. All software is divided into two general categories: data and programs. Programs are collections of instructions for manipulating data. Data can exist in a variety of forms -- as numbers or text on pieces of paper, as bits and bytes stored in electronic memory, or as facts stored in a person's mind. Data is the plural of datum, a single piece of information. In practice, however, people use data as both the singular and plural form of the word. ITU Management Faculty – MIS

13 “Data” as an Information System Component
(2) The term data is often used to distinguish binary machine-readable information from textual human-readable information. Some applications make a distinction between data files (files that contain binary data) and text files (files that contain ASCII data). (3) In database management systems, data files are the files that store the database information, whereas other files, such as index files and data dictionaries, store administrative information, known as metadata. ITU Management Faculty – MIS

14 ITU Management Faculty – MIS
Types of Data Data Represented by Alphanumeric data Numbers, letters, and other characters Image data Graphic images or pictures Audio data Sound, noise, tones Video data Moving images or pictures ITU Management Faculty – MIS

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Data  Information Data Transformation Information Processed Shaped meaningful data Raw Facts ITU Management Faculty – MIS

16 Characteristics of Valuable Information
Accurate Complete Economical Flexible Reliable Relevant Simple Timely Verifiable Accessible Secure ITU Management Faculty – MIS

17 Information System – Definition and Purpose
An information system consists of components that support decision making and control, and help with analysis, visualization, and product creation. An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose “Application”. Or Collects data, processes it into information then converts information into knowledge for a specific purpose. A set of interrelated elements or components that collect (input), manipulate (process), and disseminate (output) data and information and provide a feedback mechanism to meet an objective. ITU Management Faculty – MIS

18 ITU Management Faculty – MIS
Information Systems Procedures - A combination of technical components - Built and used by people to collect, create, and distribute useful data - Used typically in organizational settings but are evolving for personal use ITU Management Faculty – MIS

19 What is an Information System?
An information system (IS) collects, processes, stores, analyzes, and disseminates information for a specific purpose. Like any other system, an information system includes inputs (data, instructions) and outputs (reports, calculations). It processes the inputs by using Information technology and produces outputs that are sent to users or to other systems via electronic networks and a feedback mechanism that controls the operation. Feedback Input Processing Output Model of an information system ITU Management Faculty – MIS

20 Information System Is A System
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21 Input, Processing, Output,
The activity of gathering and capturing data Whatever goes into the computer Processing Converting or transforming data into useful outputs Output Useful information, usually in the form of documents and/or reports Anything that comes out of a computer ITU Management Faculty – MIS

22 ITU Management Faculty – MIS
Input (n) Whatever goes into the computer. Input can take a variety of forms, from commands you enter on a keyboard to data from another computer or device. A device that feeds data into a computer, such as a keyboard or mouse, is called an input device. (v) The act of entering data into a computer ITU Management Faculty – MIS

23 ITU Management Faculty – MIS
Output (n) Anything that comes out of a computer. Output can be meaningful information or gibberish, and it can appear in a variety of forms -- as binary numbers, as characters, as pictures, and as printed pages. Output devices include display screens, loudspeakers, and printers. (v) To give out. For example, display screens output images, printers output print, and loudspeakers output sounds. ITU Management Faculty – MIS

24 ITU Management Faculty – MIS
Feedback Feedback Output that is used to make changes to input or processing activities Feedforward A proactive approach to feedback Use for estimating future sales or inventory needs ITU Management Faculty – MIS

25 ITU Management Faculty – MIS
Data  Information Data Transformation Information Information System Processed Shaped meaningful data Raw Facts 331 Coca Cola 1lt 1,45 521 Lipton Ice Tea 1lt 1,20 332 Rodeo Bar 40gr 0,40 185 Vernel 3lt 5,25 Sales Region: Atasehir Store : BIM Item No Description Units Sold Coca Cola 1lt Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as the total unit sales of Coke or the total sales revenue from Coke for a specific store or sales territory. ITU Management Faculty – MIS

26 Management Information Systems
MIS is an organized collection of ; People, Processes, Hardware - Devices Software, Databases, That are used to provide “information” to decision makers in all levels. The vast majority of information systems are developed for and used by people in functional areas (e.g., manufacturing, human resources, accounting, finance and marketing). To develop information systems that address the needs of the organization, MIS professionals must possess a solid mix of business and technical knowledge. They must understand; organizational structures, objectives, operations (including processes and the flows of data between processes) and the financial implications related to these factors. * MIS managers and professionals must stay up-to-date with evolving information technologies and have a solid foundation of technical skills to select appropriate technologies and to implement computer-based information systems. ITU Management Faculty – MIS

27 Information Systems: Turn Data into Information
Suppliers ENVIRONMENT Customers ORGANIZATION Data Information FEEDBACK Stockholders Competitors Raw material Unformatted information Generally has no context Classify Arrange Calculate Processed material Formatted information Data given context ITU Management Faculty – MIS

28 Dimensions of information systems
Organizations – The key elements of an organization are its: People Structure Business processes Politics Culture 􀂃 Management 􀂃 Technology It isn’t just a technology: A Business perspective on information systems Complementary assets: Organizational capital and the right business ITU Management Faculty – MIS

29 Computer Based Information System
Hardware Software People Data Application Hardware Software Data/Bases Network/Telecom Procedures People More than hardware and software Together they are configured to collect, manipulate, store, and process data into information ITU Management Faculty – MIS

30 Influences on Information System
IS on the core – Building the Links Using information systems effectively requires an understanding of the organization, management, and information technology shaping the systems. An information system creates VALUE for the firm as an organizational and management solution to challenges posed by the environment. ITU Management Faculty – MIS

31 Influences on Information System
IS on the core – Building the Links ITU Management Faculty – MIS

32 Content of Information System
Widening Scope and Evolution of Information Systems There is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do. ITU Management Faculty – MIS

33 Content of Information Systems
A Business Perspective on Information Systems – The business Information Value Chain Supply Chain Management Enterprise Customer Knowledge Business Processes Management Activities Information Processing Activities Dissemination Transformation Into Business Systems Data Collection and Storage Planning Coordinating Controlling Modelling and Decision Making Business Value Firm Profitability And Strategic Position ITU Management Faculty – MIS

34 Content of Information Systems – Extended Enterprise
As IT continue to deploy multiple complex, mobile and distributed systems, the processing and managing of information in enterprises becomes costly and complicated. ITU Management Faculty – MIS

35 Business Information Systems
The interactive relationships between the information systems and organizations, both technically and socially, and the business opportunities and challenges brought about by the BIS. This describes information systems used to support the functional areas of business. “ Since the advent of the mainframe in the 1950s, companies have dreamed of “using computers to manage their businesses”. But early efforts came up short, with technology that was too costly or too clunky. Now, thanks to the Net and dashboards, those dreams are starting to come true. Forrester Research Inc. estimates that 40% of the 2,000 largest companies use the technology.” ITU Management Faculty – MIS

36 Interrelations between BIS and Organisation
Impact of Information Systems on Organizations Economic impacts Organizational and behavioral impacts IT flattens organizations Postindustrial organizations Understanding organizational resistance to change The Internet and organizations Implications for the design and understanding of information systems Mediating Factors Environment Culture Structure Business Processes Politics MANAGEMENT DECISIONS This complex two-way relationship is mediated by many factors. ITU Management Faculty – MIS

37 Interrelations between BIS and Organisation
BUSINESS Strategy Rules Procedures ORGANIZATION INFORMATION SYSTEM HARDWARE SOFTWARE DATABASE TELE-COMMUNICATIONS INTERDEPENDENCE ITU Management Faculty – MIS

38 Digital Economy – “New” Economy
E-Business: The use of electronic technologies to transact business. Collaboration: People and Organizations interact, communicate, collaborate and search for information Information Exchange: Storing, processing and transmission of information. ITU Management Faculty – MIS

39 ITU Management Faculty – MIS
Digital Business Telecommunications Networks Field Sales Internet In-office Consumer ITU Management Faculty – MIS

40 The Old Economy – Taking Photo’s
Buy film in a store Load your camera Take pictures Take roll of film to store for processing Pickup the film when ready Select specific photos for enlargement Mail to family and friends ITU Management Faculty – MIS

41 The New Economy – Taking Photo’s
1st Generation Digital Photography Old economy except 6 and 7 were replaced by using a scanner and ing 2nd Generation Digital Photography Use a Digital Camera, no film, no processing. 3rd Generation Digital Photography Your Digital Camera is now your mobile phone, in your binoculars or a palmtop computer. ITU Management Faculty – MIS

42 ITU Management Faculty – MIS
Business Models A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value Chain) Nokia makes and sells cell phones A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers. Internet portals, such as Yahoo, also use a complex business model. ITU Management Faculty – MIS

43 Digital Age Business Models
Name-Your-Own Price Reverse Auctions Affiliate Marketing E-Marketplaces and Exchanges Electronic aggregation (buying groups) ITU Management Faculty – MIS

44 Drivers Forcing Changes In Business Models
Business Pressures Environmental, organizational, and technological factors are creating a highly competitive business environment these factors or forces can change quickly, sometimes in an unpredictable manner. Therefore, companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment. A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions. Business Critical Response Activities ITU Management Faculty – MIS

45 Business Pressures on an Organization that force change.
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46 IT – enabled Organizational Responses to Business Pressures
Strategic Management & Systems Continuous Improvement – Operational Efficiency Restructuring business processes Manufacturer to order, Mass-Customization Customer Focus Strategy Electronic business Business Alliances ITU Management Faculty – MIS

47 Strategic business objectives of information systems
Operational excellence: Achieve operational excellence through higher levels of efficiency and productivity New products, services, and business models: Create new products, services, and business models Customer and supplier intimacy: Raise revenue and profits while lowering costs by increasing customer and supplier intimacy Improved decision making: Improve decision making for managers and employees Competitive advantage: Increase competitive advantages Survival: Insure survival caused by business environment changes ITU Management Faculty – MIS

48 Strategic business objectives of information systems
Operational excellence: Achieve operational excellence through higher levels of efficiency and productivity Improved efficiency results in higher profitability Information systems and technologies help to improve higher levels of efficiency and productivity Case Study: Wal-Mart the champion of combining information systems and best business practices to achieve operational efficiency—and $285 billion in sales in 2005 the most efficient store in the world as a result of digital links between its suppliers and stores ITU Management Faculty – MIS

49 Strategic business objectives of information systems
Operational excellence: Case Study: Wal-Mart It is all-purpose chain store all around America. They sell many products such as: electronics, movies, music, books, toys, jewelry, sporting goods, home appliances, garden and patio accessories, video games, apparel, gifts, pharmacy, and home craft/furniture. uses on time shipments.  They don’t keep high inventory in their back rooms, saving on storage.  When inventory in the store starts running out, the system notifies them to order more stock.  Another business process that they use is sales.  They save money with their inventory, faster customer service, using self check, and eliminating baggers saves on labor cost. Technology also helps the cashiering with better computer systems there will be fewer errors. The Information Systems Division (ISD) supports the world’s largest non-governmental database ITU Management Faculty – MIS

50 Strategic business objectives of information systems
New products, services, and business models: Create new products, services, and business models Information systems and technologies enable firms to create new products, services, and business models A business model includes how a company produces, delivers, and sells its products and services Case Studies: The music industry has seen drastic changes in business models in recent years Apple has been very successful at introducing new products and adopting a new business model ITU Management Faculty – MIS

51 Strategic business objectives of information systems
New products, services, and business models: Case Study - Apple: Apple has been very successful at introducing new products and adopting a new business model : Strong presence of networks. Launched its online store on 2003. Apple created virtual supply chains that span several continents and numerous countries with almost instantly replenishable and inexhaustable inventory with very little scaling costs. It has further integrated the processes so that there is a seamless transaction between the end user and the provider (Apple) of the content, by Apple providing the hardware to use the content as well as the content itself. Apple has managed to establish a network with all the major industry players to ensure a smoothly functioning supply chain for its digital content. ITU Management Faculty – MIS

52 Strategic business objectives of information systems
Customer and supplier intimacy: Raise revenue and profits while lowering costs by increasing customer and supplier intimacy Customers who are served well become repeat customers who purchase more Close relationships with suppliers result in lower costs Case Studies: The Mandarin Oriental in Manhattan uses information systems and technologies to foster an intimate relationship with its customers including keeping track of their preferences JCPenney uses information systems to enhance its relationship with its supplier in Hong Kong ITU Management Faculty – MIS

53 Strategic business objectives of information systems
Customer and supplier intimacy- Case Study: The Mandarin Oriental in Manhattan deployed Hotel Service Optimization System (HotSOS") to automate workflow and communications, wirelessly connect service staff to each other, guests, groups and meeting planners for unmatched personalized, prompt service. HotSOS is helping the hotel keep everyone "in the loop" in real time so service levels consistently can exceed the expectations of guests. “ Before HotSOS, when our occupancies were high, say 90-percent-plus, it would take us more than six minutes to respond to a guest request and deliver on their needs. With HotSOS, a bellman or front desk staff, can instantly easily submit a service request to a department and all related managers based on customized business rules, and within minutes we have the guest request and notify all in the loop. Number of requests taking more than six minutes to fulfill has dropped 75%. This means more-loyal customers, more of their precious repeat business and referrals." Reading : ITU Management Faculty – MIS

54 Strategic business objectives of information systems
Improved decision making: Improve decision making for managers and employees A company’s bottom line can be hurt by managers being swamped with data that are neither timely nor helpful, forcing them to use guesswork Real-time data have improved the ability of managers to make decisions Case Studies: Verizon uses a Web-based digital dashboard to update managers with real-time data on customer complaints, network performance, and line outages ITU Management Faculty – MIS

55 Strategic business objectives of information systems
Improved decision making: Case Study- Verizon one of the world’s leading providers of communications services. Verizon’s domestic wireline telecommunications business provides local telephone services, including broadband, in 28 states and nationwide long-distance and other communications products and services. Verizon Wireless, provides wireless voice and data products and services across USA. Information Services operates directory publishing and electronic commerce services. Uses a digital dashboard corporate intranet that gives employees up-to-the-minute data on company performance. It also offers a Web-based service allowing customers to decide which calls are routed to specific phones. Reading: "The dashboard puts me and more and more of our executives in real-time touch with the business. The more eyes that see the results we're obtaining every day, the higher the quality of the decisions we can make." Ivan Seidenberg _ Verizon CEO ITU Management Faculty – MIS

56 Strategic business objectives of information systems
Competitive advantage: Increase competitive advantages Achieving the previously mentioned business objectives often leads to competitive advantage Advantages over competitors include charging less for superior products, better performance, and better response to suppliers and customers Case Studies: Dell Computer is one of the best examples of establishing competitive advantage as the company has continued to be profitable during a time when PC prices have been falling steadily ITU Management Faculty – MIS

57 Strategic business objectives of information systems
Survival: Insure survival caused by business environment changes Businesses may need to invest in information systems out of necessity Necessity arises from keeping up with competitors- necessity also arises from federal and state regulations Case Studies: Citibank introduced ATMs- the Toxic Substances Control Act and the Sarbanes-Oxley Act ITU Management Faculty – MIS

58 Strategic business objectives of information systems
TOYOTA CASE Problem: Tough competition and demanding customers. Solutions: Redesigned order and production processes reduce costs, increase revenue, and improve customer service. E-Business software makes it possible to build cars to order and forecast demand and production requirements more accurately. • Demonstrates IT’s role in analyzing market trends and monitoring quality, efficiency, and costs. • Illustrates the emerging digital firm landscape where businesses can use tools to analyze critical data. ITU Management Faculty – MIS

59 Strategic business objectives of information systems
TOYOTA CASE Reading: An Evaluation of Toyota Motor Company (TMC) Information Systems, Ryan Morris ITU Management Faculty – MIS

60 Strategic business objectives of information systems
TOYOTA CASE ITU Management Faculty – MIS

61 Information Technology Capital Investment
50% 34% Between 1980 and 2004 IT investment (hardware inv.+ software inv.+ communications equipment inv.) grew from 34% to 50% in U.S.A. In (Explore ! And Analyze!) Source: Based on data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, 2006. ITU Management Faculty – MIS

62 The emerging digital firm
ELECTRONIC COMMERCE- ELECTRONIC BUSINESS -ELECTRONIC MARKET An organization where nearly all significant business processes and relationships with - customers, - suppliers, - employees are enabled and key corporate assets are managed digitally. • Information system links all parties to exchange information, products, services, payments • Core business processes are accomplished through digital networks and span the entire organization or link multiple organizations. • Key corporate assets — intellectual property, core competencies, and financial and human assets — are managed through digital means. • Internal and external environments are quickly recognized and dealt with. • Information technology is the “core of the business” and “the primary management tool”. ITU Management Faculty – MIS

63 Information System – Classification By Organizational Structure
An information system (IS) can span departments, business units and corporations. Departmental IS Enterprise-Wide IS Inter-Organizational IS Information systems are usually connected by means of electronic networks ITU Management Faculty – MIS

64 Information System Classification By Organizational Structure
The various types of systems in the organization have interdependencies. TPS are major producers of information that is required by many other systems in the firm, which, in turn, produce information for other systems. These different types of systems are loosely coupled in most business firms, but increasingly firms are using new technologies to integrate information that resides in many different systems. BUSINESS INTELLIGENCE ITU Management Faculty – MIS

65 Information System - Classification By Function (Department)
An information system (IS) support each department in a corporation. Operations Accounting Finance Marketing Human resources Transaction Processing Systems (TPS): Automates routine and repetitive tasks that are critical to the operation of the organization ITU Management Faculty – MIS

66 Information System - Classification By Function (Department)
An information system (IS) support each department in a corporation. ITU Management Faculty – MIS

67 Information System - Classification By Functional Perspectives
Sales Contact customers Sell the product Take the order Follow-up on the sale 5 year sales forecast Marketing Identify customers Determine what they want Planning products Advertising and promoting products Determine prices for products Purchasing Which vendors Quantity to purchase Coop, rebate tracking Handle delivery discrepancies Generate the purchase order Manufacturing Control Equipment and machinery Design new products When and quantity of products to produce New production facilities Generate the work order Human Resources Employee wages, salaries & benefits Long term labor requirements Tracking vacation, sick, Track employee skills Interview and review employees Finance Financial Assets Investment management Banking Long term budgets Accounting Accounts Receivable Disbursements Payroll Depreciation Earned Coop and Rebates ITU Management Faculty – MIS

68 Information System - Classification By Support Function
5-year sales trend Profit Planning 5-year budget forecasting Product development Executive Support System Strategic Level Sales Management Inventory Control Annual budget Production Scheduling Cost Analysis Pricing Analysis Management Information System Decision Support System Intelligent Support Systems Business Intelligence Management Level Simulation Pgm coding System support Word Processing Desktop Publishing Knowledge Management System Office Automation System Knowledge Level Order Processing Fulfillment Material Movement A/R, A/P, GL Payroll POS Transaction Processing System W o r k e r s Operational Level ITU Management Faculty – MIS

69 Information System - Classification By Function (Department)
An information system (IS) support each department in a corporation. Operations Accounting Finance Marketing Human resources Transaction Processing Systems (TPS): Automates routine and repetitive tasks that are critical to the operation of the organization ITU Management Faculty – MIS

70 From Information Technology to Information Systems
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71 Contemporary Approaches to Information Systems
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72 Contemporary Approaches to Information Systems
Sociotechnical systems Information systems and the use of technology belong to everyone in an organization. This concept is best carried out through a sociotechnical approach to viewing information systems, which allows both the technical and behavioral approaches to be combined for the good of the organization. ITU Management Faculty – MIS

73 Information Society Evolution: Terms and Issues
1960 2000 Knowledge Society (Drucker ) Term invented to describe the next evolution of society This evolution would be a result of the rise in the numbers and importance of knowledge workers in society Education was described as the cornerstone of the knowledge society as it is core to the knowledge worker Drucker was right again! ITU Management Faculty – MIS

74 IS Role in Change: Trends and Terms
Downsizing (Sometimes called Rightsizing) Reducing organizational headcount to meet the financial goals of the organization IT is viewed as the lever to provide the systems necessary to increase productivity Outsourcing Transferring business functions outside the organization to increase service levels and/or reduce operating cost IT is not immune to this trend. Certain commodity IT technical jobs will be increasingly transferred overseas IT must find better methods to manage offshore work ITU Management Faculty – MIS

75 Information Society Evolution: Periods of Change
Agricultural Industrial Informational (Prior to 1890’s) (1890’s to 1960’s) (1960’s to Present) ITU Management Faculty – MIS

76 Information Society Evolution: Terms and Issues
1960 2000 Knowledge Worker (Peter Drucker 1959) A term invented to describe a future trend in the workforce These will be professionals that create, modify and/or synthesize information as a fundamental part of their job They will require higher education levels and received higher compensation than workers in agriculture or manufacturing The term is still generally accepted today (Drucker was right!) ITU Management Faculty – MIS

77 Information Society Evolution: Terms and Issues
1960 2000 New Economy (Wired Magazine - Late 1990s) Similar to “knowledge society” but more descriptive Describes a society where people use their brains more than their hands in their work and personal lives Where communications technology and other IT systems will create global competition for all products and services Other names: Digital Economy, Network Era, Internet Era ITU Management Faculty – MIS

78 The New Economy (NE): Social Perspectives
Perspective 1: Sims –Taylor The new economy creates risks for Knowledge Workers Knowledge workers will be the first to be replaced by automation with information technology Perspective 2: Rikfin The overreliance on information technology has caused society to act hastily (excess rapidity) The result has been a loss of perspective Perspective 3: THE DIGITAL DIVIDE Those with access to information technology have great advantages over those that don’t IT access will further polarize society ITU Management Faculty – MIS

79 ITU Management Faculty – MIS
Trends in Technology Cost-performance ratio of chips keeps improving. Moore’s Law, his prediction was that the processing power of silicon chips would double every 18 months. Several new devices and methods to increase storage capacity price performance Object-oriented programming technology enables the development of self-contained units of software that can be shared Networked and distributed computing is emerging rapidly (Metcalfe’s Law). ITU Management Faculty – MIS

80 ITU Management Faculty – MIS
Trends in Technology Internet Mobile Computing and M-Commerce Wireless networks Pervasive Computing Smart Devices ITU Management Faculty – MIS

81 ITU Management Faculty – MIS
Trends in Technology The Networked Enterprise The Network Computer Optical Networks Storage Area Networks Intranets & Extranets The Internet ITU Management Faculty – MIS

82 Article Readings and Case Studies
An Evaluation of Toyota Motor Company IS Politics of the Future – How the Internet is changing and will change politics forever How Obama’s Internet Campaign changed Politics (NY Times) (http://www.barackobama.com/ Obama Everywhere) How Information Technology is Revolutionizing the Field of Medicine Nestle Struggles with Enterprise Systems Please read and comment on “any” of these cases ! To be discussed in Week 3, opening session… ITU Management Faculty – MIS


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